contractor holding his bid documents for tender date


Bid bonds are very important. As a construction company owner, you need to learn about bonds because they’re a vital component of any construction project. Failing to obtain bonds means that you won’t be able to secure the project. You want your business to succeed.

To do that, you have to obtain and use bonds. The construction industry uses a variety of bonds including bid, performance, and payment bonds. These are the most common, so you’ll want to familiarize yourself with them.

The bid bond is the first step. It is the first bond you’ll obtain when bidding on a new project. What does a bid bond mean? This guide will help Texas construction company owners learn more about bid bonds and their meaning.


A bid bond guarantees the obligee that if the bidder is selected, they will complete the project at the stated price as they have the financial resources to do so.


A bid bond is a type of  construction surety bond that is used in the Texas construction industry. The bid bond is an essential component. A bid bond is required before your construction company can make a bid on any project.

The bid bond is a surety bond used when placing a bid on any project. The bid will not be accepted unless you obtain a bid bond and submit it with the bid. Once you’ve obtained a bid bond, you’re agreeing to follow the obligations outlined in the bid. You agree to stick with the bid in question.

Furthermore, once your bid has been accepted, you’ll need to look into a performance bond and how does a performance bond work? If you don’t complete this step, you won’t be able to accept the project. Once you’re bonded, you’re obligated to live up to your end of the bargain.


Ultimately, the use of bid bonds in construction is not only vital as it is required for most if not all projects, but it is also one of the most common types of construction bonds available. Texas construction company owners will learn more about this bond because they’ll use it regularly. Before your company can place a bid on any project, you will need to obtain a bid bond. The bid bond is submitted with the bid. It lets the client know that you’re going to stick with the bid and get the performance bond. It tells them that you’re not playing around.

In addition to this, the bid bond lets the client know that your company is financially sound. It confirms that you’re ready and willing to get the job done on time. Once you’ve obtained the bond, you’re obligated to live up to your end of the bargain and get things completed.


Getting bonded can be expensive. However, the price depends on the type of bond you’re obtaining.

To learn more about the costs and prices of different types of bonds, please take a look at the following links:

  Costs of Construction Bonds

•  Cost of Bid Bonds

•  Rates of Bid Bonds

•  Asking Price of Bid Bonds

•  Cost of Performance Bonds

Furthermore, you have to understand that this bond is required. Your business will never succeed unless you learn how to obtain and use bid bonds to your advantage. This bond ensures that you’re moving in the right direction. Bid bonds offer protection to everyone involved. First and foremost, you should know that the bid bond protects your company. It increases the likelihood that your company is going to be picked for the job.

It does this by preventing unsavory companies from bidding on the project. If the company cannot get a bid bond, they won’t be able to bid on the project. This ensures that only qualified companies are bidding. This also protects the client by letting them know that they’re dealing with legitimate companies. The client doesn’t want to search for a new contractor midway through the project The bid bond decreases the risk that they’ll need to do that.

Finally, it ensures that the client will be able to seek compensation if the Texas contractor defaults. While getting bonded may seem like a headache, it is essential and beneficial.

To learn more about this in detail, please take a look at the purpose of bid bonds and how does a bid bond work?


At the end of the day, Texas companies will be required to get bid bonds. However, there are some unique situations when bid bonds are not required. There might be one or two cases when you don’t need a bid bond. However, you likely will.

The Miller Act requires companies to obtain bid bonds when bidding on federal projects. Furthermore, it should be noted that many private companies have adopted this rule. Therefore, you can guarantee that you’ll need to get a bid bond at some point. You need to learn how to obtain one of these bonds, so you can get the project quickly.

Before submitting a bid, you should find out if a bond is required. If it is, you should contact Stokes Surety Bonds. They’ll team you up with a professional surety expert, so you can get bonded sooner rather than later.


Bid bonds, performance bonds, and payment bonds are very helpful because they protect several parties. As a construction company operator, bid bonds will help your chances. When placing a bid, you’re going to be competing against many companies. You’ll compete against companies that aren’t even in your league. The bid bond can help separate your company from the lesser competition. The bid bond proves that your company is financially stable. Furthermore, you’re showing that your company is going to go to great lengths to satisfy its clients.

Some companies won’t or can’t get bid bonds, which removes them from the competition pool. So, this requirement gives you an edge over the competition. Furthermore, bid bonds offer protection to the client. They have ways to get compensation if the contractor defaults on the contract. This requirement may seem like a hassle, but it’ll pay off dividends in the long run.


Before you can obtain a bid bond, you’ll need to team up with a surety. In the bigger scheme of things, there are three parties. There is the principal, obligee, and surety. The obligee is your client. This is the owner or developer of the project. This individual or entity will be hiring your company to perform the work. Then, you have the principal. You are the principal. You are bidding on the project and hope to get the contract. Finally, you’ll need to learn more about the surety.

This is the agency or company that issues the construction surety bond. You will pay the surety company to give you the bid bond. The surety plays an important role because they’ll deal with problems when they arise. If something goes wrong, the obligee could file a claim against the principal’s bond. When this happens, the surety company will need to decide what to do. It is important to choose a surety company that will work hard on your behalf.


Obtaining a bid bond may seem complicated. However, it doesn’t need to be. Ultimately, the process should be fast and easy. To make things easier, you should work with a responsive, efficient surety company. Stokes Surety Bonds can point you in the right direction. How long will it take to obtain a bid bond, so you can place your bid before your competitors get the chance? Generally, the turnaround time for bid bonds will depend on current market conditions. If the industry is very busy, you may experience a delay.

However, most insurance companies or surety agents will be able to help you get a bid bond in one day. Before you can do that, you need to show the agent your books. They should be in order. Furthermore, you need to prove that your company has sufficient equity. Fulfilling these obligations will help speed up the process so you can place your bid sooner rather than later. If you’re not prepared, there is a risk that you’ll have to wait a week or two before you can get a bid bond.


To keep your business afloat and to maintain your good name, it is essential to avoid surety bond claims. Claims are filed when a client believes you’re not living up to your end of the bargain. Or, they could file a claim because you’re not going to complete the work on time. It is important to note that claims can also be filed against performance bonds

Thankfully, there are ways to reduce your risks. First and foremost, you should avoid taking shortcuts. It may take longer, but you should always do your best. Follow all guidelines and standards so you can give the client the best results.

Furthermore, you’ll want to be fair and honest with your clients. You may feel the need to lie to your client so you can get more business, but this will backfire in the end. Instead, you’ll want to be honest. Tell them how long it is going to take, so they’ll know what to expect. Finally, you’ll want to keep your client informed throughout the process.

When you’re ready to move to the next step, you should tell your client. Move forward and keep them up to date. If you run into problems, you should inform them and keep them in the loop to ensure that you can avoid all claims.


After you’ve obtained a bid bond and have submitted your bid, you’ll need to wait for an answer. If you win the bid, you’ll need to obtain additional bonds. You’ll need a performance bond, and you may also need a payment bond. The requirements depend on the project you’re dealing with. Either way, Stokes Surety Bonds is here to help. Contact the company to find out how they can help you!